The Xyience bankruptcy proceedings continued Tuesday in U.S.
bankruptcy court in Las Vegas. Judge Mike K. Nakagawa gave final
approval to an additional $2.6 million loan from Zyen, a Fertitta
controlled company, and a licensing agreement with Zuffa, parent
company of the UFC.

Proceeds from the loan will be used to fund the company as it seeks
a potential buyer, while the licensing agreement allows the UFC
trademark to continue to appear on Xyience products. The agreement
was allegedly worth $8 million in revenue to Xyience, according to
filings with the court.

Judge Nakagawa acknowledged that the Fertitta-controlled companies
drove "hard bargains," according to a report in the Las Vegas
Review-Journal, but he believed Xyience would be forced to shut
down without the agreements. Attorneys for the unsecured creditors
opposing the loan characterized the transaction as a "lend to own"
strategy on the part of the Fertittas, reported the
Review-Journal.

According to the filings in the case, the original $12 million note
was repayable in one year with a 15-percent interest rate and was
collateralized by all of Xyience's assets. The terms also allegedly
included warrants for 10 percent of capitalization of the company
at one cent per share and 50 percent of the company's equity if
Xyience failed to repay.

The ruling seemed to clear the way for Xyience's creditors, chiefly
Zyen, in the bankruptcy proceeding. Unless a buyer is found, Zyen
stands in position to assume ownership of the reorganized company
as the largest secured creditor.

The ruling was a setback for the shareholder group, which is
contesting the Zyen financing arrangement in the bankruptcy
proceeding as well as a separate civil complaint against Xyience,
its former officers, Adam Frank and Kirk Sanford, and Key
Management in Nevada district court.

The Review-Journal reported that Xyience's attorney told the court
that a potential buyer was sitting in the courtroom. When asked,
Xyience President Omar Sattar declined to identify the buyer.
However, multiple shareholders have suggested that the Fertittas
will purchase Xyience.